sarah edelman change your thinking pdf merger

The urgency of the climate crisis is the driver for this. Widespread adoption of many of the recommendations by the Task Force on Climate-related Financial Disclosures (TCFD) shows that the international community is closer to agreement on standards for reporting climate-related “E” metrics within ESG.

This is the moment for ESG - particularly for leadership on environmental factors in the year of COP26, the upcoming UN Climate Change Conference - to measure what matters, inform capital allocations, empower investors, drive innovation and support the transition through adaptation and mitigation. Many industries face a “burning platform” of constricted investment flows, shareholder activism and shifts in consumer preference the EY Future Consumer Index has recently shown that 43% of global consumers want to buy from businesses that benefit society, even at a higher cost.įinancial services firms also need to be able to rely on more accurate and consistent information to minimize high-carbon portfolios, maximize greener options or work with companies to lend or insure more equitably across all communities. Yet there is an urgent need for ESG to mature to the same level as financial disclosure - for society and for business. The intent of ESG to help stakeholders understand more about an organization's broader commitments, performance and impact is very commendable. We call this emerging dynamic, which connects financial disclosures more closely to ESG and indicates the innovation of additional disclosures ahead, “FESG+.” By adding in elements that positively differentiate themselves from others they are pushing to be more attractive to investors, employees, consumers and others. While it is easy to characterize this as a one-way flow of increasing demands on companies to disclose more, it is also true that leading companies are embracing a broader vision of ESG to set out their unique narrative and to drive innovation. It also needs flexibility and a forward-looking element because future investors and other stakeholders, including governments and regulators, appear set to continue their demands for more information to be disclosed – with new relevant metrics appearing over the horizon at a greater pace than we have ever seen before. This will help businesses to rethink how they use ESG to inform strategic choices, drive innovation, and articulate how they’re creating long-term value.

There needs to be a stronger connection between the “F” of financials and ESG - “FESG” - otherwise the true costs and opportunities of business aren’t properly measured. ESG needs to mature to have the same level of rigor and relevance as financial disclosures and to better demonstrate the economic impact of different ESG strategies and targets. For each of these stakeholders, ESG is already helping - but it must evolve more quickly as appetite grows amongst investors to make more precise decisions.

Sarah edelman change your thinking pdf merger